TUP Capital Inc. and Orthoforge Inc. Announce Proposed Qualifying Transaction

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OTTAWA, ON / ACCESSWIRE / May 16, 2023 / TUP Capital Inc. (TSXV:TUP.P) ("TUP") and Orthoforge Inc. ("Orthoforge", together with TUP, the "Parties") are pleased to announce the signing of a letter of intent dated effective May 15, 2023 (the "LOI") pursuant to which TUP has agreed to acquire all of the issued and outstanding securities of Orthoforge (each, an "Orthoforge Security") in exchange for the issuance of securities of TUP (the "Transaction").

The Transaction will result in a reverse takeover of TUP by Orthoforge, and will constitute TUP's "Qualifying Transaction" as defined in the policies of the TSX Venture Exchange (the "Exchange"). TUP and Orthoforge are at arm's length and the Transaction will not be a non-arm's length transaction under the policies of the Exchange. On closing of the Transaction (the "Closing"), it is expected that TUP (being, following the Closing, the "Resulting Issuer") will be listed as a Tier 2 Technology Issuer on the Exchange, and its business will be that of Orthoforge.

About TUP

TUP is a Capital Pool Company (as defined in the policies of the Exchange) led by Paul Barbeau (Chief Executive Officer) and David Chow (Chief Financial Officer). Its principal business activity is to identify and evaluate opportunities to acquire assets or a business. Incorporated in 2020 under the laws of the Province of British Columbia, TUP is a reporting issuer in the Provinces of British Columbia, Alberta and Ontario. Its common shares (each, a "TUP Share") are listed for trading on the Exchange under the symbol TUP.P.

About Orthoforge

Orthoforge, a corporation existing under the laws of the State of Delaware, incorporated on August 10, 2016, is a medical technology company that has created a wearable sensor patch that utilizes acoustics to quantify the stage of bone fracture and soft tissue injuries. Orthoforge uses a unique algorithm to analyze ultrasonic sound waves as bone and soft tissue heal from traumatic injury.

Orthoforge's wearable sensor patch has diagnosis-assisting software and constant on-demand telemetry, designed to address the limitations inherent in the healing process. Orthoforge's wearable sensor patch is intended to reduce the number of CT Scans, X-rays and office visits necessary in monitoring bone and soft tissue healing, with the goal of reducing exposure of patients to harmful radiation and the typical costs associated with analyzing bone injuries. Its objective is to provide a quantifiable real-time assessment of a patient's current stage of healing, utilizing personalized precision medicine to produce reliable results and improved outcomes for patients.

Terms of the Transaction

The Transaction is expected to proceed by way of an amalgamation, share exchange or such other structure as may be determined by the parties. As contemplated in the LOI, at Closing, TUP will issue such number of TUP Shares (or other applicable TUP securities following any internal capital reorganization) to the holders of the Orthoforge Securities as have an aggregate value of $10,750,000, based on a deemed price of $0.20 per TUP Share, or such other deemed price per share as may be determined by the parties.

Completion of the Transaction will be subject to various conditions, including: the parties entering into a definitive agreement with respect to the Transaction; the parties obtaining all required directors', shareholders', regulatory and third-party consents for the Transaction, including the conditional approval of the Exchange; completion of the Concurrent Financing (as defined below); and compliance with applicable listing requirements of the Exchange. No finder's fees are expected to be paid in connection with the Transaction.

As the Transaction is not a non-arm's length transaction under the policies of the Exchange, TUP is not required to obtain shareholder approval for the Transaction. However, TUP intends to hold a special meeting of shareholders to approve certain matters ancillary to the Transaction, which may include, among other things: a reorganization of TUP's share capital; the adoption of a new omnibus equity incentive plan and amendments to TUP's articles to include advance notice provisions with respect to the nominations of directors.

Upon completion of the Transaction, Orthoforge will become a wholly-owned subsidiary of the Resulting Issuer, and the Resulting Issuer will change its name to "Orthoforge Inc." or such other name as may be determined by TUP and Orthoforge (the "Name Change"), and will continue with the business of Orthoforge.

The final structure of the Transaction, including any internal reorganization required by TUP and/or Orthoforge, will be determined after the parties have considered applicable tax, securities and accounting matters.

Proposed Concurrent Financing

Prior to the Closing, TUP is expected to undertake a concurrent financing for aggregate gross proceeds of up to $3,400,000 (the "Concurrent Financing"), or such other amount as may be determined by the parties, on terms to be determined in the context of the market. Additional information with respect to the Concurrent Financing will be disclosed in a subsequent news release.

All of the securities to be issued under the Concurrent Financing will be subject to a statutory hold period of four months and one day from the closing of the Concurrent Financing under applicable Canadian securities laws and may be subject to additional resale restrictions under applicable securities laws of other jurisdictions, including the United States. In addition, certain of the TUP Shares to be issued to holders of Orthoforge Securities pursuant to the Transaction may be subject to escrow or other resale restrictions under applicable securities laws or the policies of the Exchange. None of the securities to be issued in connection with the Transaction or the Concurrent Financing will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws, and may not be offered or sold within the United States or to any U.S. Person (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where such offer or solicitation would be unlawful, including the United States.

Management and Directors of the Resulting Issuer

At the Closing, it is anticipated that all current officers of TUP, other than Mr. Barbeau, will resign and that the board of directors of the Resulting Issuer will consist of at least five directors, one of whom will be nominated by TUP, two of whom are expected to be nominees of Orthoforge, and two of whom will be mutually agreed upon by the parties.

Biographies and titles of the proposed new directors and officers of the Resulting Issuer are set out below. Once finalized, the names and biographies of any additional directors and officers (if any) to be appointed to the Resulting Issuer in connection with the Closing will be disclosed in a subsequent news release.

Dr. Brent Nowak (PhD) - Chief Executive Officer and Director

Dr. Brent Nowak (PhD) is the CEO, a director and co-founder of Orthoforge, as well as the founder and executive director of the Applied Medical Device Institute (aMDI), a non-instructional unit of the Grand Valley State University (Grand Rapids, Michigan) that provides engineering, regulatory, and commercial services to companies, entrepreneurs and start-ups. Prior to his role at Orthoforge, he was the founder and a director of the Robotics & Intelligent Machine Laboratory at the University of Texas at San Antonio. Dr. Nowak co-founded the Center for Advanced Manufacturing and Lean Systems at the University of Texas at San Antonio and secured an educational partnership and development agreement with the US Navy Undersea Warfare Division, which expanded into a multi-university program (Naval Engineering Education Consortium). Dr. Nowak also has experience with the Assistant Director of the Advanced Manufacturing Department of Southwest Research Institute, the Robotics Research Group at the University of Texas at Austin, Rockwell Space Operations and NASA. He received his Bachelor of Science in Mechanical Engineering (BSME) from the University of Illinois - Champaign, his Master of Science in Mechanical Engineering (MSME) from the Illinois Institute of Technology - Chicago, and his Ph.D from the University of Texas at Austin. Dr. Nowak resides in Grand Rapids, Michigan.

Erik Hall - Chief Operating Officer and Director

Erik Hall is the COO and a director of Orthoforge. In addition to his role at Orthoforge, Mr. Hall is the president of Lee Shore Enterprises, a private investment office that focuses on both large asset acquisitions as well as early stage equities in the life science and technology communities. In addition, Mr. Hall has experience in engineering and marketing with various industrial manufacturing and services companies, including Halliburton, Trane, Mead Johnson and Plascore. He holds a Master of Business Administration (MBA) from Michigan State University and a Bachelor of Science in Engineering (Industrial Engineering) from Purdue University. Mr. Hall resides in Grand Rapids, Michigan.

Paul Barbeau - Chief Technology Officer and Corporate Secretary

Paul Barbeau, the CEO and a director of TUP, brings more than 25 years of experience working in the public markets in various capacities, including as a chief executive officer, chief financial officer, corporate secretary, director and promoter. He recently worked as chief technology officer for a Toronto-based investment fund and provided technical due diligence. Mr. Barbeau, a serial entrepreneur, has also been president of hyperNET Inc., an IT consulting firm, since 1993, and was awarded Top 40 under 40 in Ottawa. Mr. Barbeau resides in Ottawa, Ontario.

Michael Labiak - Independent Director

Mr. Labiak is a is an entrepreneur and investor. From 2011 to 2013, Mr. Labiak was the chief operating officer, executive vice-president and one of the founders of Essex Angel Capital Inc., a publicly listed investment issuer company. He has also served as a director of Soleil Capital Corp. and NBS Capital Inc. From 1991 until his retirement in 2014, he was the general manager of Windsor Honda Automotive, and between 1991 and 2017, owned and operated several apothecary-style pharmacies with his wife, a pharmacist. He has participated in over 20 different financings, many of which were undertaken in connection with "go public" transactions. He holds a Bachelor of Arts, Finance, from Michigan State University. Mr. Labiak resides in La Salle, Ontario.

Dave Pfeiffer - Independent Director

Dave Pfeiffer brings over 30 years of operational and development expertise in the pharmaceutical and medical device space. He is currently the CEO of Vimalan Biosciences Inc., a private, venture capital backed company which is developing a topical treatment for atopic dermatitis, and was previously the president and CEO of Ralexar Therapeutics, a dermatology company focused on developing novel treatments in the dermatology space. Mr. Pfeiffer also previously served as chief commercial officer of Ellman International, a supplier of radiofrequency generators and aesthetic lasers to various physician specialties, and chief commercial officer of CollaGenex Pharmaceuticals, a publicly traded company, from 1997 to 2008, which was sold to Galderma in 2008. Prior to his time at CollaGenex, Mr. Pfeiffer worked at several large pharmaceutical companies, including Glaxo SmithKline and Zeneca Pharmaceuticals, in various sales and marketing roles. He holds a Bachelor of Science (Physiology) from Rutgers University and a Masters in Management from the J.L. Graduate Kellogg School of Management at Northwestern University. Mr. Pfeiffer resides in Philadelphia, Pennsylvania.

J. Michael Magnus - Independent Director

Mr. Magnus has extensive leadership and management expertise in the food and energy industries, with previous positions including president and CEO of Open Global Blue Services, chairman and CEO of CherryTee Foods Inc., president and CEO of Shear Wind Inc. (TSXV: SWX), and executive vice-president of Clearwater Fine Foods Inc. (TSX: CLR.DB.B:CC). Throughout his career, his focus areas have included corporate strategy and performance, business planning development and execution, organizational restructuring, change management, governance and investor relations. He holds a Bachelor of Arts from Carleton University. Mr. Magnus resides in Greenwich, Nova Scotia.

Sponsorship

The Transaction will be subject to the sponsorship requirements of the Exchange unless a waiver or exemption from the sponsorship requirement is available. If required, a sponsor will be identified at a later date and will be announced in a subsequent news release. TUP intends to apply for a waiver of the sponsorship requirement in connection with the Transaction.

Trading in TUP Shares

Trading in TUP Shares on the Exchange has been halted in compliance with the policies of the Exchange in connection with the announcement of the proposed Transaction, and is expected to remain halted pending the review of the proposed Transaction by the Exchange, and satisfaction of the conditions of the Exchange for resumption of trading. It is not expected that trading in the TUP Shares will resume prior to the Closing.

Further Information

A summary of significant financial information with respect to Orthoforge, as well as further details about the proposed Transaction, the Concurrent Financing, and the expected directors, officers and other insiders of the Resulting Issuer following the Closing, will be included in subsequent news releases.

Further details about the Resulting Issuer will be provided in the disclosure document to be prepared and filed in connection with the Transaction. Investors are cautioned that, except as disclosed in such disclosure document, any information released with respect to the Transaction may not be accurate or complete and should not be relied upon.

All information in this news release concerning TUP and Orthoforge, as applicable, was supplied by management of such party and has not been independently verified by the other party.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of TUP should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

For further information, please contact:

TUP Capital Inc.
Paul Barbeau, Chief Executive Officer
Phone: 613.218.5319
Email: paul@npn.ca

Orthoforge Inc.,
Dr. Brent Nowak (PhD), CEO, co-Founder
Phone: 210.325.2780
Email: bnowak@orthoforge.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements Regarding Forward-Looking Information

This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements are statements other than statements of historical fact that can be identified by phrases such as "expects", "anticipates", "intends", "aims", "plans" and "believes", and are based on expectations, estimates and projections as at the date of this news release. Forward-looking statements in this news release include, but are not limited to, statements with respect to: the proposed terms of the Transaction, the definitive agreement and the Concurrent Financing; the expected directors and officers of the Resulting Issuer; and the business of Orthoforge. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; failure to enter into a definitive agreement with respect to the Transaction; failure to complete the Concurrent Financing; failure of the Exchange to approve the Transaction; that factors may occur which impede Orthoforge's future business plans; the results of continued development, marketing and sales; and other factors beyond the control of TUP and Orthoforge. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. TUP disclaims any intention or obligation to update or revise any forward-looking statements in this news release, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE: TUP Capital Inc.